Question

Sunspot Beverages, Ltd., of Fiji uses the weighted average method in its process costing system. It makes blended tropical fruit drinks in two stages. Fruit juices are extracted from fresh fruits and then blended in the Blending Department. The blended juices are then bottled and packed for shipping in the Bottling Department. The following information pertains to the operations of the Blending Department for June. Percent Completed Materials Conversion 1000 250 Work in process, beginning Started into production Completed and transferred out Work in process, ending Units 20.000 180,000 160.000 40.000 1008 258 Work in process, beginning Cost added during June Materiala Conversion $ 25,200 $ 24.800 $ 334,800 $ 238.700 Required: 1. Calculate the Blending Department's equivalent units of production for materials and conversion in June. 2. Calculate the Blending Department's cost per equivalent unit for materials and conversion in June. 3. Calculate the Blending Department's cost of ending work in process inventory for materials, conversion, and in total for June. 4. Calculate the Blending Department's cost of units transferred out to the Bottling Department for materials, conversion, and in total for June 5. Prepare a cost reconciliation report for the Blending Department for June.

Answer 1

1.

		Materials		Conversion Costs
Particulars	Units	% of Completion	Equivalent Units	% of Completion	Equivalent Units
Completed and Transferred out	160,000	100 %	160,000	100 %	160,000
Work in Process, ending	40,000	100 %	40,000	25 %	10,000
Total	200,000		200,000		170,000

2.

	Materials	Conversion	Total
Cost of Work in Process, beginning	$ 25,200	$ 24,800	$ 50,000
Costs added during June	334,800	238,700	573,500
Total costs	360,000	263,500	623,500
Equivalent units	200,000	170,000
Cost per Equivalent Unit	$ 1.80	$ 1.55

3.

	Materials	Conversion	Total
Ending Work in Process, Equivalent Units	40,000	10,000
Cost per Equivalent Unit	$ 1.80	$ 1.55
Cost of Ending Work in Process Inventory	$ 72,000	$ 15,500	$ 87,500

4

	Materials	Conversion Costs	Total
Units Completed and Transferred Out	160,000	160,000
Cost per Equivalent Unit	$ 1.80	$ 1.55
Cost of Units Completed and Transferred to Bottling Department	$ 288,000	$ 248,000	$536,000

5.

Blending Department Cost Reconciliation For the month ended June 30
Costs to be accounted for:
Cost of Work in Process,beginning	$ 50,000
Costs added during the month	573,500
Total costs to be accounted for	623,500
Cost of Work in Process, ending	87,500
Cost of units completed and transferred to the Bottling Department	536,000
Total costs accounted for	$ 623,500